In re Goa Tourism Development Corporation Limited (GST AAAR Goa)
The case of Goa Tourism Development Corporation Limited (GTDC) vs. the GST Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Rulings (AAAR) centers around the applicability of Goods and Services Tax (GST) on one-time concession fees. The GTDC leased its Anjuna property to M/s Myrayash Hotels Pvt. Ltd. for 60 years, charging a significant one-time upfront fee. The question raised was whether this fee is subject to GST, given certain exemption notifications.
Background and Initial Application
GTDC entered into a concession agreement with Myrayash Hotels Pvt. Ltd. on December 9, 2016. The agreement involved a one-time upfront concession fee of INR 25.20 crore for the use of Anjuna property over 60 years. The lease was based on the DBFOT (Design, Build, Finance, Operate, and Transfer) model. GTDC sought an advance ruling to determine whether this upfront fee was exempt from GST under Notification No. 12/2017-Central Tax (Rate), as amended by Notification No. 32/2017-Central Tax (Rate).
In its application, GTDC referenced the exemption notification, which exempts the upfront amount for long-term leases of industrial plots by government entities. GTDC argued that their lease met the criteria for this exemption.
